Fixed-rate mortgages in 2025: good or worrying news?
The stress of moving home and mortgage considerations
There’s no doubt that moving home is a stressful time – not the least because of the various costs that need to be considered amongst the very long list of things that need to be achieved so that the move can go as smoothly as possible.
The biggest cost amongst them, of course, is the mortgage, with the necessity to find the deposit amount, let alone budgeting for the monthly repayments in order to protect your new home from becoming the latest casualty of repossession.
Property ladder challenges and regional housing disparities
It’s well-known that getting on to the property ladder is a difficult step – and that each successive step up that ladder becomes easier because you have the collateral of something to sell.
The problem is that, for decades, the rate of house price inflation has significantly outpaced that of the average wage or salary increase, which means there is a dwindling choice of properties within your budget as time goes on. This isn’t helped by regional disparity, and moving to a more affordable area might be odds with your family, social and work ties – it’s all well and good to be able to afford something reasonable in County Durham, where house prices are generally one of the lowest in the country, if you have a family and important social life in Hertfordshire, which is going to be more expensive for a similar house, because of its proximity to London.
This is why mortgage companies compete for your custom by offering various products to entice you to take a loan out with them. And one of those products is the fixed-rate mortgage.
The idea behind a fixed-rate mortgage is to offer a competitive rate for a fixed period (usually set at two or five years), after which the rate will become variable and set against the Bank of England’s base rate.
It has been announced that fixed-rate mortgages are being offered by many of the mortgage lenders at a rate of less than 4%, with a kind of price war breaking out as each of these institutions fight for prominence to provide you with the offers.
Important considerations for homebuyers starting the conveyancing process
While this might look like a good way of jumping onto that first rung or to move to a larger property with the help of the sale of your current one, there are some cautionary notes to take on board, as the article points out.
Generally speaking, the lower the fixed-rate mortgage offer is, the higher the deposit is likely to be required in order to qualify. This is especially difficult for the cost-conscious homebuyer with access to only limited funds – for instance, if you are renting, your monthly payments to the landlord may prohibit or make it difficult to find any extra cash to put by to build the deposit amount.
The other consideration is that we are currently in a period of extraordinary global uncertainty created by some of the geopolitical impacts, and additional problems fuel costs, the high cost-of-living, and shortages of housing supply pushing prices up domestically.
Financial risks and the value of expert mortgage advice
While this turmoil continues, many financial commentators are thinking that the Bank of England is likely to reduce the base rate further. But it should be pointed out that mortgage lenders have almost certainly taken these predictions into account in setting the levels of their fixed-rate products.
Which means that anyone borrowing now in the hope that the rates will go down further are taking a financial risk that needs to be mitigated before going ahead with the decision.
Although you are no doubt wanting to cut your planned move costs to as near the bone as possible, it might be wise to seek the guidance of a mortgage broker. They will have all the latest market information and details on the huge variety of mortgage products that are available, and they will be able to guide you to the best product that can be tailored to your precise needs.
Best Value Conveyancing: quality service at competitive rates
When it comes to the conveyancing process when you are ready to make your move, with Best Value Conveyancing, you’ll be sure that the full legal service is kept moving without sacrificing quality. We will assign you to one of the best solicitors to look after the legal aspects of your move, thereby ensuring the speediest process possible.
With Best Value Conveyancing, you’re in safe hands. All our quotes are fixed prices, and we tell you the price of the standard disbursements up front.
We provide a quality conveyancing service at a very competitive rate – better value than most other local firms or online firms you’d be able to find. That’s why we’re the best value. Not just cheap conveyancing, but Best Value Conveyancing. Our fees are better than anything you’ll find on the high street.
Check out our prices – they’re hard to beat, and you won’t find a better online conveyancing service for this low price!
Best Value Conveyancing offers a no completion, no fee guarantee, should your sale or purchase fall through, even if you are gazumped. Call us now on 0800 0387 007 (which is also free from mobiles) to start your transaction moving today!
You really are in safe hands with us!
